My two cents:
Like most contributors to this thread, I do not put a high priority on transforming the Front End into a competitor for a general document processor (FrameMaker, MSWord, etc.). I want decent documentation of technical and scientific calculations. The 2.0 Front End didn't make the grade. Some of my colleagues and all of my commercial clients resisted documents produced by the 2.0 Front End. Furthermore, the PC version of the 2.0 front end had serious additional weaknesses--no bracket matching, no function browser, no function signature templates, no automatic grouping of cells, and so on.
A qualified "Hurray" for the PC 3.0 Front End, a big improvement is these regards and in PC-Mac compatibility. Now Wolfram Research needs to get the wrinkles out, starting with--
o Avoid the spontaneous corruption of notebooks. Completely prevent the saving of corrupted notebooks, or failing that, automate a system of backup notebooks that can retrieve the most recent valid notebook when a corrupted notebook fails to open.
o Get graphics import and export working--top priority being cross-platform formats, especially EPS.
o Make the system more tolerant of compound "symbols" like Subscript[a,j] and Overscript[b,^]. There are too many places where only atomic Symbols are accepted and yield the expected result. Symbolize[] avoids this restriction but at the cost of other restrictions and complications. Symbolize[] is a cool band-aid, not a great long-term solution.
o Make it easy to put the current date and time in the footer. I cannot get this to work now.
Then I would value some minor short-term improvements to the Front End:
o Spell checker (if this is not too hard)
o The Find and Replace fields that accept input in StandardForm, including alias shortcuts.
o User-definable hot keys for common symbols like ESC->ESC and common commands like Format/Font/...
o Make it easy to hide some or all input cells in a notebook in other Printout or another Environment while continuing to see them in Working Environment. This facilitates one approach to hiding ugly commands from some readers.
o Provide some way to improve the horizontal distribution of stuff: maybe TAB stops; maybe let me subdivide a cell vertically into two or three side-by-side cells, evaluated left-to-right; maybe...?
Medium term, I need major improvements in the Front End's 3D and animated graphics and sound or (better solution?) tight integration with third-party multimedia tools, as others have suggested.
Mathematica's export capabilities to TeX and HTML are right on target (if they work). Alas, many clients would like to import results into MSWord. For their benefit, I would value RTF export to MSWord and its equation writer. I would avoid it myself, because the poor handling of equations by MSWord and the like would waste my time. The only exception I'm familiar with is Scientific WorkPlace, which saves its files in a flavor of TeX. So in principle, Mathematica's TeX output filter is a great idea for me (once EPS graphics can be exported!). In practice. Scientific WorkPlace has deviated from TeX standards enough to make this impractical. But that would not seem to be Wolfram Research's problem.
In summary, the design objectives for display and export of the 3.0 Front End are about right, so now the job is to finish meeting these objectives. I would hate to see Wolfram "get out of the front-end business." Maybe I'm over-reacting to the poor impression that the MatLab-MSWord kludge made on me 1.5 years ago.
Tom Burton